Crisis in Catalonia and the Spanish Property Market

Recently, the regional government of Catalonia called for a referendum on whether to seek independence from Spain or not. Less than 40% of the people of Catalonia participated in the referendum, which was declared as illegitimate by the Spanish government.

But the regional government Catalonia carried on regardless and said that the people of the province had voted for independence from Spain. Following this, the regional President of Catalonia, Carles Puigdemont declared independence from Spain.

The response of the Spanish Prime Minister Mariano Rajoy was swift and brutal. Prime Minister Rajoy immediately sacked the entire Catalan government and dismissed all top Catalan police officers and bureaucrats. He took over the administration of the province and declared elections to be held in a few months time.

Many Catalan ministers have been put behind bars for treason and Carles Puigdemont is in exile in Belgium. An international arrest warrant has been issued for him.

What does this mean for you if you have a property for sale in Spain? While there are many experts who suggest that there is some uncertainty in the Spanish real estate scenario because of the situation in Catalonia, we are of a different opinion.

As a matter of fact, as things have turned out, what happened in Catalonia can be described as a good crisis – as it has strengthened the hold of Prime Minister Rajoy over the administration and really rejuvenated the pro-Spanish forces. The voices of independence in Catalonia have been drowned out and they find no support anywhere in Europe, with even the European Union having nothing to do with the idea of Catalan independence.

Spain, as it turns out, has clearly won this round and Prime Minister Rajoy has emerged as the dominant figure in Spanish politics because of his decisive response which saved the day for Spain.

As one political observer, Citi's Antonio Montilla said, "I think the Catalan crisis has strengthened Rajoy's position. His image among Spanish voters has recovered significantly in recent weeks relative to the negative perception of the heavy police response (during) the illegal October 1 Catalan self-determination referendum."

Spain is in a very good condition economically. Its GDP grew at 3.2% in 2017, which is the fastest among major European nations and the country received a record number of tourists in 2017. With the holiday season still to go, the number of tourists visiting Spain is set to go higher than last year’s figure of 76 million.

This is excellent news for the property market in the country. There are a lot of foreign investors who are eager to buy properties in Spain online and the demand is fast reaching the level last seen in the pre-2006 period. Things are certainly looking good for Spain, despite the crisis in Catalonia.